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Comment by monero-xmr | Hacker News Reader

I'm c-suite and the most important function of layoffs is to preserve the business as an ongoing concern, preserving what jobs I can. If the business fails, everyone loses their job, which is terrible!

Now, if the reason for layoffs is due directly to poor decisions by someone who should not have reasonably made that decision given the variables in front of them, that person should probably be terminated. But layoffs can occur for all manner of reasons. If you are in the business of making feather hats, and suddenly feather hats go out of style because of shifts in market demand, how can you fire the business leader? Not everything is in the control of management. Management comes in every day, sees the situation before them, and makes the best decisions they can to grow the business.

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Good comment.

If you (anyone who reads this) are an employee, remember this is how c-suite people see you.

You're cost. You're something that prevents the business from being "preserved". You're like water or electricity bills from the businesses' point of view. You'll be fired not because you did anything wrong: firing you is nothing different from using less water. Water, of course, can't be wrong or right.

That's why you should have zero loyalty to the business. (You're water bills. Water bills don't have loyalty)

That seems like a mischaracterization of what the comment said.

Businesses do not exist for making jobs. If we wanted jobs simply for jobs’ sake, then we would pay people to dig holes and fill them in (a lot of government jobs are glorified versions of this).

Businesses exist to fulfill a market need, and every business fulfilling that market need competes in some axis of cost vs. quality.

We are all human. I feel for people laid off. I have been laid off before, and businesses I operated have failed - full stop. I’m talking complicated bankruptcy with the courts and everything. This is not a good outcome for anyone except the court appointed lawyers.

Even when I lay people off, or if people quit on their own for greener pa$ture$, I maintain relationships with people who I respect. More often than not I meet these people again, either hiring them directly or working with them again. The world isn’t zero sum, and being laid off isn’t a sociopathic situation of management vs. labor.

I absolutely don't think that businesses exist to make jobs. You'll never find me saying so. Continue on my own analogy, thinking businesses exist to make more jobs is just like thinking they exist to use water. It would be crazy if anyone said it out loud this way.

One of the reasons businesses (and business leaders to some extent too) argue for reduced tax burdens is because “they are job creators”.

It’s literally an argument many businesses make when lobbying.

Lobbyists don't exist to accurately inform the populace or to profess sincerely held beliefs but to effect advantageous political change.

Indeed. My point is that the “job creator” argument is flip flopped depending on whatever is convenient.

There's not even a contradiction there, let alone flip flopping: That businesses create jobs doesn't imply that job creation is their primary purpose, and getting two different answers to two different questions from two different people simply is not flip flopping.

When businesses are laying people off because they’re prioritising profit and also arguing for tax incentives because they’re creating jobs… then yes, I’d call that a contradiction of actions.

But maybe we’ll just have to agree to disagree on this.

Businesses exist to make money for their owners, full stop. Any needs they fulfill are largely incidental.

That's how we end up with businesses like landlords, which fulfil negative needs and extract value without creating anything at all.

Making it possible to live in a house without having the money up front to buy one does provide value.

If they weren't owned by landlords, you'd have the money up front to buy one.

That does not follow at all. How would, for example, a college student with no assets be able to buy a house up front if landlording was illegal?

How do they buy anything else, like textbooks or coffee? They have a student loan - that's how.

You ever met a college student with an Xbox? If we stopped treating houses as an investment and started treating them as a commodity like Xboxes, you could afford one.

I very much doubt it because it takes many times as many resources to create a house than an Xbox. Making housing loans to people with no income or assets is a great way to cause a financial collapse, as we saw not too many years ago.

This is how I explain senior execs to junior engineers: their job is not to write code or give speeches, it’s almost entirely about making decisions in the absence of perfect information.

That’s an important skill. But it also provides the perfect cover for bad decisions, because “we didn’t know then what we do now.”

So I have little sympathy for the c-level exec who ends up on the wrong side of events as they unfold, because…that’s the gig. If they don’t want unfair blame they can get a different job.

Good take. It's pretty much the entire function of being C-Suite, putting your ass on the line for decisions nobody wants to make and having the confidence/credentials/ego/whatever to get people to buy into your decision.

That’s true, but also keep in mind executives aren’t fired for making bad decisions, they’re fired because the board (or CEO) thinks someone else can do better going forward.

Or to take blame for past company performance, or for political reasons, or whatever. All of that might fall under "someone else can do better." Sometimes execs are fired for making bad decisions, whether fairly or unfairly.

If the police want to pull you over, they can always find a reason. Same with a board firing an exec. Whether the nominal reason is the same as the actual reason is pretty hard to tell from the outside.

Again, that's the gig, and if someone doesn't want the uncertainty or the downside risk, they can hand the compensation back and do something where performance is more measurable and treatment is more equitable. By the same token, my view of a "successful exec" depends on repeated success over time, not just a hot IPO or a good quarter.

It is your job to anticipate the market – you are responsible for all the business decisions! If you're allowed to shrug it off and say "we didn't see this coming, we did the best we can, by the way 3.8% of you are getting laid off because of this but not me, even though I made the calls", well, it sounds like you're just milking the business for yourself until it well and truly goes kaput.

> is your job to anticipate the market

No, it’s not. It’s to engage it best.

Take two cultures: one that executes leaders for making bad calls and one that judges them according to what they knew when they made the decision. Who wins?

We’ve run this experiment hundreds of times because it’s appealing to think steep consequences for bad decisions leads to good decisions. But it doesn’t. It causes caution and indecision. The example that comes to mind is Carthage vs. Rome; the former executed failed generals while in Rome "defeated generals seldom faced serious punishments" [1].

[1] https://www.cambridge.org/core/journals/libyan-studies/artic...

Then the compensation model is inherently unfair if the rank and file is forced to bear the brunt of bad leadership.

> the compensation model is inherently unfair if the rank and file is forced to bear the brunt of bad leadership

Considering solely risk, sure. There are other relevant inputs. More pertinently, this is why we have public services and safety nets.

So we outsource bad decision making of overcompensated people to the public. Brilliant.

Anyone can put their hat in the ring and get into management. I wasn’t born with a silver spoon, I had no connections, and I attended a weak school. I worked my fucking ass off and networked everywhere I could. I built a reputation.

If you can convince people that you are deserving of leadership, you have the guts to put yourself on the line in front of tens or hundreds or thousands of people, go ahead. This is your life and the people you are responsible for. If you do this and want to work for peanuts, be my guest. I get paid what the market thinks I’m worth.

You’re making all valid statements, but we see CEOs driving businesses into walls, and refuse to take responsibility. I size things for a living, a mistake can mean injury or death. If this happens I tell you I’ll have to bear the consequences. And I’m having an average pay. What’s the market thinks about this? Genuinely interested to know.

I don’t disagree with what you posted but the last sentence needs highlighting:

> I get paid what the market thinks I’m worth.

It helps when “the market” is your peers who also benefit from benchmarking higher salaries for management.

If only coders who held CEOs to that kind of standard held themselves to the same standard when bugs are found in their code. Are you just "milking the business" when you don't compensate it for the cost of remedying the bugs you wrote? And the answer is, of course, yes, you and the CEO are and any reasonable excuse you could make applies to the CEO as well.

Is that really tantamount to cutting off someone's source of income and livelihood?

> who held CEOs to that kind of standard held themselves to the same standard

Why? It makes perfect sense to hold CEOs to a much higher standard than ordinary employees. There is nothing flawed about that at all.

> excuse you could make applies to the CEO as well.

Well it shouldn’t

What’s with the sense of entitlement towards jobs in HN?

Businesses will continue to employee you as long as they think it’s a net benefit to them. Their outlook can change at anytime and for nonsensical reasons.

I would suggest accepting this state of affairs. That might mean making sure you have savings, or up to date job skills. Refusing to believe this can happen to you because you have worked so hard or been so loyal will only lead to heartache.

We've built a world where you either get a job, or you are culled from the population. Culling is inhumane, so the only way to resolve that moral quandary is to guarantee jobs.

Being culled occurs when you are not in the workforce. It’s not the same issue as a guarantee to your current employer.

Either way these are just wishful normative statements. The business reality is that they will not guarantee you a job.

> If you are in the business of making feather hats, and suddenly feather hats go out of style because of shifts in market demand, how can you fire the business leader?

Were you a c-suite at Kodak or something? "There was nothing we could do after people didn't want to shoot photos on film anymore" meanwhile Fujifilm pivoting hard into chemical materials, makeup, medical etc etc (although ironically due to the meteoric rise of Instax, their highest income is once again consumer photo film...)

You fire the business leader because he didn't see the writing on the wall and expand into down comforters, other styles of hats, etc etc.

That's one view of the world. One people try to push for but I don't agree with. It's OK for companies to have a lifecycle associated with what they do. There's no need for companies to be behemots that last forever. If you are a hat company, to me there's no direct implications that tells me it's better for society if the hat company starts making shoes vs the company ending and different cohorts of employees going to different places, potentially some founding a shoe company, potentially not.

Many many dollars are wasted due to companies trying to survive at all costs and fail at it.

But a company deciding "okay, were done" and just shutting down is effectively laying off 100% of the staff. This company's leadership is already getting flak for laying off under 4%.

Sure and laying off 100% of staff might be better for society if you can replace the jobs with higher productivity ones somewhere else.

Same with unions, instead of starting one to fix a dystopian company with bad leadership, could be better to have the employees leave and have the company go downhill than trying to fix something that isn't worth fixing.

> Same with unions, instead of starting one to fix a dystopian company

There is immense value in the company structures themself. You can't just bail and take them with you. The inertia of the customer base for example. It has to be really bad to not be worth fixing if the alternative is redo from the ground up.

Some fields have less moat though.

> The inertia of the customer base for example. It has to be really bad to not be worth fixing if the alternative is redo from the ground up.

This only matters from the pov of the company. From the pov of society those customers will move faster or slower to better competitors, which is what you want. Though you don't even need to have them have to figure it out from one day to the next, you could for example go to your best competitor ask them for money to buy your customer base, and use that money to pay your creditors, employees etc in the bankrupting process.

Building companies takes resources. Just bailing if the executives go mad is probably not optimal either. You can somewhat keep executives or shareholders in check and protect them from each other by being difficult. Just as long as not both are bad, or at least only temporary bad.

But with job hoping being incentived I guess it is futile?

There are so much BS I blame on the concept of job hoping engineers. Companies can't even make bags for spaghetti nowadays that are openable by hand since there are a constant churn of newbie plastic pasta bags engineers around at them.

>This only matters from the pov of the company. From the pov of society those customers will move faster or slower to better competitors

It absolutely matters to customers. Depending on the type of business, it could be extremely inconvenient to have to change to a different one when they close.

>Sure and laying off 100% of staff might be better for society if you can replace the jobs with higher productivity ones somewhere else

Maybe, if you ignore the costs of huge swaths of people being layed off.

The costs depend on a lot of variables we're assuming here, they might be negligible. In some european countries where I live (not sure how it works in the US) if you get fired you'll get several months up to ~2 years - depends on the country - of subsidies while you look for jobs. Of course there will be more stress during the months you are switching but economically, having big companies with old business models, syphoning subsidies and tax breaks and all manner of life support measures just to stay alive... In many cases you'd spend less by letting the company go bankrupt and supporting the employees directly in their transition.

And once they come back to the workforce, every month of increased productivity might be "making it back" much faster.

The vast majority of tech layoffs this year had nothing to do preserving the business as an ongoing concern.

> how can you fire the business leader?

Ummm... why wouldn't you fire the business leader in that situation? He locked the company in to a niche market that was subject to the volatility of fashion choices when he could have had his feather techs fletching arrows or stuffing pillows. Had the bet paid off, he'd reap the benefits.

I think the point being made is that management costs a business disproportionately more than lower-level employees, so arguably plenty of cuts should be seen there too if cost-cutting were really the only concern. It's just basic statistics if all else is truly equal.

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